January 18, 2013

Finding a Tax Pro

Tax time has been delay a little this year because of the
last minute changes Congress made to the tax code. But it’s still approaching
fast and I’m getting a lot of calls from taxpayers who are beginning to think
about filing their tax returns. Some taxpayers will be doing it themselves or
they have a tax return preparer they intend to stick with. But if you are
looking for a tax pro, I have a few suggestions to make the process easier. It’s
always amazed me how many people walk into my office and hand me their W-2s
because I was the first open office they found. You are entrusting a lot of
personal information to a stranger, it’s worth a little time and effort to
check that person out.

What do you need? Take a step back and think about what you
need in a preparer. How complex is your return? Be honest. I don’t know how
many times a caller will tell me they have a simple return and it turns out that
the return was very complex. Look at a prior return. And look not just the
forms added to the Form1040 but the line entries. There are some complex tax
calculations done behind the scenes. Taxable Social Security comes to mind.

How much can you spend? Notice I asked “how much can” not
“how much to you want”. Come up with a reliable idea of what you can spend. You
may have to spend much more but having a target many protect you from a good
talker upselling later in the process.

What other requirements do you have? Is location an issue
because of transportation? What about the times you’re available? Are there accessibility
or language issues?

Once you have an idea of what you need, ask family and
friends for suggestions. Who do they use? Do they recommend them? Get two or
three possibilities if you can. Learn about each preparer from your family and
friends and then supplement that with info from ads and the internet (websites,
Facebook, Google+). No recommendations, then work from ads and internet to
create a starter list. Be wary of websites that list preparers. Some are built
from yellow pages info and list most everyone. Other sites are promotional not
objective. The preparer signs up with the website and can edit their profile
and sometimes edit reviews too. Use the info from these sites for general
knowledge but not to make a final decision. For that, you need to talk to the
preparer.

What does the preparer have to say? Once you have a short
list and an idea who each preparer is, give them a call and ask some questions.
Besides giving you information to make a decision, you can get a feel for the
person and the office. My suggestions are below but you probably have questions
of your own to add to the list. And watch out for expectations. Just because
your previous preparer did something a certain way doesn’t mean that another
preparer will run their office the same. Expectations.

Are they taking new tax return clients?

What is their designation? Are they an EA, CPA or general
preparer? The differences are discussed here. By the end of 2013, all preparers
will be licensed but currently a great preparer may not have any initials after
their name. But they will have a PTIN (preparer id number).

What experience do they have? How long have they been
preparing returns and what training have they had?

What tax returns do they do? Some preparers don’t do complex
returns or returns with EITC or certain forms.

How do they charge? Any idea on average cost? What payment
options do they have? Do they bill? Please note: if they charge by the size of
the refund, hang up. That is illegal and could mean that they are falsifying
the return to generate a higher fee. But don’t expect the preparer to quote you
an exact price over the phone. Also be aware of “extras” like fees to have the
preparation charges come out of the refund and audit insurance.

What are their hours? What about after April 15th?
Will they be available if you need them?

What other services do they offer? Some offer refund
programs others may sell investments or insurance.

What are their office procedures? Do they require
appointments? Do they take drop-offs? Who will actually be preparing the
return? How long will it take to get your completed return?

What guarantees do they have? What happens if you get
audited? What are the extra charges?

These and the questions you come up with should help you
make an objective and informed decision about a new tax pro. The next step is
getting your tax return prepared. Good luck!

Disclaimer

Disclaimer

A reader should seek advice from an independent tax adviser with respect to the information on this blog based on the reader’s particular circumstances. This advice is intended to be general information and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS regarding the transaction or matters discussed here.